Preparing for a tax inspection

There is almost always time before an inspection. A scheduled documentary inspection is published in advance in the tax authority’s plan, and it comes with an order and written notice. That interval decides the outcome: what can be corrected calmly in a fortnight cannot be corrected at all once the inspection has begun.

Where an inspection starts

Before doing anything we establish the grounds: which kind of inspection this is – desk, scheduled documentary, unscheduled documentary or on-site – what period it covers, which taxes are in scope, and whether the procedure for ordering it was followed. A defect in the order or the notice is a ground for objection in its own right, and it is worth spotting before rather than after.

What we do before the inspector arrives

• pull the source documents for the period under inspection and check them against what was filed;
• check that contracts, certificates, invoices and transport documents are present and complete;
• look for gaps with counterparties and for entries recorded without evidence that the transaction was real;
• check that every taxable object has been registered on form 20-OPP;
• restore what has been lost and correct errors by amended return where that is still possible and worthwhile;
• prepare answers to the questions that are almost certain to be asked.

If the inspection has already started

We see it through to the report: we watch that requests stay within the subject and period of the inspection, prepare answers to written questions, record procedural breaches where they occur, and represent you in dealings with the inspector. A director does not have to hold those conversations personally.

At the end we draft objections to the inspection report and, where needed, an administrative appeal.

For clients on the monthly service, inspection support is included and not priced separately once an inspection has been scheduled.

What the fee depends on

Scope follows the period the inspection covers, how many source documents fall in it, which taxes are being examined and the state of the books when you come to us. Preparing for a single quarter and preparing for three years while reconstructing lost documents are very different tasks.

Common questions

How do we find out about a scheduled inspection in advance?

Scheduled documentary inspections appear in the plan the tax authority publishes, and notice is also given in writing, with the inspection itself ordered formally. If you learn of an inspection on the day the inspector arrives, it is probably not a scheduled one, and the grounds are worth checking separately.

Can we refuse to admit the inspector?

Refusal has consequences, up to administrative seizure of assets, so it is not a decision taken in haste. But admission is not automatic either: the order, the identification and the assignment documents are checked first. Where they are defective, that is recorded – and it is what later carries the objections.

What if we have already found an error in our books?

While the inspection has not begun, many errors can be corrected by filing an amended return, and that is almost always cheaper than the penalty for the same error found by an inspector. Once the inspection starts, that route closes for the period concerned.

Can you represent us during the inspection?

Yes. We handle the correspondence, prepare answers to written requests and are present in dealings with the inspector, and at the end we draft the objections to the report.